Financial Figures (year ending in may 2011)

[Harry]

What these figures tell you and it does not really matter what player sales are included or excluded is that the club has been run very very poorly from a financial perspective. I have not looked at the accounts in detail but I suspect the simple truth is we are dependant on regular cash injections from RL as our ongoing costs exceed income.

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

Just a couple of techie points:

The £12m charge for football management personnel changes would include all personnel in the various management teams that left not just the manager and I could see it including the payments to get McLeish as they might be able to argue that into that year. Logic being you get all the bad news in this year if possible.

Some posters seem to think that all the proceeds of a player sale hit the profit and loss account as income. That's not the case. The cost of a player is spread over the length of his contract and charged to profit.

Take Downing as an example. We paid £12m for him on a four year deal I think so we would have charged £3m a year to the P&L. Two years later we sell him for £20m. The profit on sale would be £14m (£20m less 2x £3m). Assuming we got paid in full up from which is not always the case our cash in would be £20m but that figure would not appear in the P&L, the £14m would.

You can all wake up now

[Risso]

What these figures tell you and it does not really matter what player sales are included or excluded is that the club has been run very very poorly from a financial perspective. I have not looked at the accounts in detail but I suspect the simple truth is we are dependant on regular cash injections from RL as our ongoing costs exceed income.

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

Just a couple of techie points:

The £12m charge for football management personnel changes would include all personnel in the various management teams that left not just the manager and I could see it including the payments to get McLeish as they might be able to argue that into that year. Logic being you get all the bad news in this year if possible.

Some posters seem to think that all the proceeds of a player sale hit the profit and loss account as income. That's not the case. The cost of a player is spread over the length of his contract and charged to profit.

Take Downing as an example. We paid £12m for him on a four year deal I think so we would have charged £3m a year to the P&L. Two years later we sell him for £20m. The profit on sale would be £14m (£20m less 2x £3m). Assuming we got paid in full up from which is not always the case our cash in would be £20m but that figure would not appear in the P&L, the £14m would.

You can all wake up now

How would McLeish's compensation to Birmingham be in the accounts to May 2011? I'm fairly sure we first approached him after this date, so it's unlikely that anybody could argue that there was a liability as at 31 May 2011.

[thetrees]

What these figures tell you and it does not really matter what player sales are included or excluded is that the club has been run very very poorly from a financial perspective. I have not looked at the accounts in detail but I suspect the simple truth is we are dependant on regular cash injections from RL as our ongoing costs exceed income.

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

Just a couple of techie points:

The £12m charge for football management personnel changes would include all personnel in the various management teams that left not just the manager and I could see it including the payments to get McLeish as they might be able to argue that into that year. Logic being you get all the bad news in this year if possible.

Some posters seem to think that all the proceeds of a player sale hit the profit and loss account as income. That's not the case. The cost of a player is spread over the length of his contract and charged to profit.

Take Downing as an example. We paid £12m for him on a four year deal I think so we would have charged £3m a year to the P&L. Two years later we sell him for £20m. The profit on sale would be £14m (£20m less 2x £3m). Assuming we got paid in full up from which is not always the case our cash in would be £20m but that figure would not appear in the P&L, the £14m would.

You can all wake up now

How would McLeish's compensation to Birmingham be in the accounts to May 2011? I'm fairly sure we first approached him after this date, so it's unlikely that anybody could argue that there was a liability as at 31 May 2011.

Unless a provision was made, but that would be crediting the club management with foresight.....

[Risso]

What these figures tell you and it does not really matter what player sales are included or excluded is that the club has been run very very poorly from a financial perspective. I have not looked at the accounts in detail but I suspect the simple truth is we are dependant on regular cash injections from RL as our ongoing costs exceed income.

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

Just a couple of techie points:

The £12m charge for football management personnel changes would include all personnel in the various management teams that left not just the manager and I could see it including the payments to get McLeish as they might be able to argue that into that year. Logic being you get all the bad news in this year if possible.

Some posters seem to think that all the proceeds of a player sale hit the profit and loss account as income. That's not the case. The cost of a player is spread over the length of his contract and charged to profit.

Take Downing as an example. We paid £12m for him on a four year deal I think so we would have charged £3m a year to the P&L. Two years later we sell him for £20m. The profit on sale would be £14m (£20m less 2x £3m). Assuming we got paid in full up from which is not always the case our cash in would be £20m but that figure would not appear in the P&L, the £14m would.

You can all wake up now

How would McLeish's compensation to Birmingham be in the accounts to May 2011? I'm fairly sure we first approached him after this date, so it's unlikely that anybody could argue that there was a liability as at 31 May 2011.

Unless a provision was made, but that would be crediting the club management with foresight.....

You can't make a provision for a liability that has nothing to do with that year's accounts. If it could be proven that we induced McLeish to break his contract before 31 May 2011, then they could make a provision if they considered it likely that compensation would be payable.

[Zatman]

Villa need a wage cap like tottenham do. however i think we need a cap of around 25-30k.

Problem is too many average Premier League players get more money than that a week including many of our players

[Harry]

What these figures tell you and it does not really matter what player sales are included or excluded is that the club has been run very very poorly from a financial perspective. I have not looked at the accounts in detail but I suspect the simple truth is we are dependant on regular cash injections from RL as our ongoing costs exceed income.

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

Just a couple of techie points:

The £12m charge for football management personnel changes would include all personnel in the various management teams that left not just the manager and I could see it including the payments to get McLeish as they might be able to argue that into that year. Logic being you get all the bad news in this year if possible.

Some posters seem to think that all the proceeds of a player sale hit the profit and loss account as income. That's not the case. The cost of a player is spread over the length of his contract and charged to profit.

Take Downing as an example. We paid £12m for him on a four year deal I think so we would have charged £3m a year to the P&L. Two years later we sell him for £20m. The profit on sale would be £14m (£20m less 2x £3m). Assuming we got paid in full up from which is not always the case our cash in would be £20m but that figure would not appear in the P&L, the £14m would.

You can all wake up now

How would McLeish's compensation to Birmingham be in the accounts to May 2011? I'm fairly sure we first approached him after this date, so it's unlikely that anybody could argue that there was a liability as at 31 May 2011.

Unless a provision was made, but that would be crediting the club management with foresight.....

You can't make a provision for a liability that has nothing to do with that year's accounts. If it could be proven that we induced McLeish to break his contract before 31 May 2011, then they could make a provision if they considered it likely that compensation would be payable.

I did say 'might'.

Accountancy is often an art rather than a science and the only reason I suggested that was that I suspect the club will, as far as its allowable, dump all the bad news into this year rather than the current one, PwC permitting of course.

[Risso]

You can't massage the figures like that though. As you hint at, PwC would boot it out immediately. Window dressing is what they call it, but it's almost impossible these days with rigorous accounting standards. (Banking collapse not withstanding).

[DeepDish]

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

I think the problem is that Randy Lerner underestimated how hard it was to fill the stadium and increase the revenues at the biggest club in England's second city.

He has missed totally in the revenue side, and thus the wages that he felt were ok to pay out, indeed was too much too handle for the club.

And regarding accounting techincals. Milner was bought for 12 mill, got a 4 year contract and was sold for 26 mill after 2 years. The profit on that deal should be 20 mill. That makes the reported numbers even worse and makes me wonder what the hell is going on.

[MikeMcKenna]

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

I think the problem is that Randy Lerner underestimated how hard it was to fill the stadium and increase the revenues at the biggest club in England's second city.

He has missed totally in the revenue side, and thus the wages that he felt were ok to pay out, indeed was too much too handle for the club.

And regarding accounting techincals. Milner was bought for 12 mill, got a 4 year contract and was sold for 26 mill after 2 years. The profit on that deal should be 20 mill. That makes the reported numbers even worse and makes me wonder what the hell is going on.

Depending on the source Milner was sold for 26m or 24m on a cash plus player basis I.e. Ireland who was said to be worth £8m so the cash was 16m or 18m.

Another fantastic deal by our amateur CEO! There are regular references to how much MON wasted. How much has PF wasted? Houllier, McLeish, Ireland - clearing in the woods!

[DeepDish]

OK that justifies the need to cut the wage bill but it then begs the question how the hell did the club let the situation arise?

I think the problem is that Randy Lerner underestimated how hard it was to fill the stadium and increase the revenues at the biggest club in England's second city.

He has missed totally in the revenue side, and thus the wages that he felt were ok to pay out, indeed was too much too handle for the club.

And regarding accounting techincals. Milner was bought for 12 mill, got a 4 year contract and was sold for 26 mill after 2 years. The profit on that deal should be 20 mill. That makes the reported numbers even worse and makes me wonder what the hell is going on.

Depending on the source Milner was sold for 26m or 24m on a cash plus player basis I.e. Ireland who was said to be worth £8m so the cash was 16m or 18m.

Another fantastic deal by our amateur CEO! There are regular references to how much MON wasted. How much has PF wasted? Houllier, McLeish, Ireland - clearing in the woods!

The cash flows are a different thing than profit and losses.

If Milner is sold for 26 mill, the profit is 20 mill. No matter what happened with Ireland.

Here is the numbers:

Milner buying price: 12 mill.

Milner amortizations the two first season: 6 mill.

Milner selling price: 26 mill (or 24)

Profit: 26 mill (or 24) - 12 mill (buying price) + 6 mill (amortizations that has already been booked in accounts) = 20 mill (or 18 mill).

Then the numbers for Ireland:

Buying price: 8 mill

Ireland amortizations last season: 2 mill

Ireland amortizations this season: 2 mill

Value in the accounts at end of 2011/12 season: 4 mill.

If he is sold at 5 mill this summer, Aston Villa will book a profit of 1 mill in the accounts.

[ender4]

Look at how our wages have increased over the years:

06/07 - £23m

07/08 - £50m

08/09 - £50m

09/10 - £80m

10/11 - £83m

Yet in the Premier league, we still had the 7th highest wages, and so should have been capable of finishing 7th.

Going forward, 2011/12 (this season) we will still have the 7th highest wages, even after cutting the wage bill.

[barry'sboots]

You can't massage the figures like that though. As you hint at, PwC would boot it out immediately. Window dressing is what they call it, but it's almost impossible these days with rigorous accounting standards. (Banking collapse not withstanding).

You can provide for costs if you had a reasonable expectation that they would arise. At that time we knew Ged was ill (the decision to get rid may already have been made) and we would be likely to require a replacement and that would cost, hence prudency dictates that you provide that cost. Its not called window dressing, its called prudent accounting. :winkold:

[dudevillaisnice]

Thought this was interesting...

Paul Kelso ‏ @pkelso

Interesting in #AVFC accounts: 'The directors have received confirmation that the owner intends to support the group for at least one year'

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Paul Kelso ‏ @pkelso

Aston Villa's full accounts for 2010-11 have dropped. Income £92m, expenses £158.7m. Do the math, as they say in the Lerner household #AVFC

Paul Kelso ‏ @pkelso

2010-11 wage bill at #AVFC £83m, profit on player sales £18m. To clarify these numbers from accounts for holding co Reform Acquisitions Ltd

[Risso]

Just got the actual accounts at last.

The actual operating loss made was an almighty £66m! This was increased by a £6m interest charge, and then reduced to the reported £54m by profit on player trading of £18m (presumably the Milner sale).

We are now insolvent to the sum of £20m, which is even worse than I thought it would be.

[ender4]

Just got the actual accounts at last.

The actual operating loss made was an almighty £66m! This was increased by a £6m interest charge, and then reduced to the reported £54m by profit on player trading of £18m (presumably the Milner sale).

We are now insolvent to the sum of £20m, which is even worse than I thought it would be.

wow, an operating loss of £66m!

though that does include the one-off £12m charge, so in a normal year that would have been £54m loss.

[TheEgo]

Just got the actual accounts at last.

The actual operating loss made was an almighty £66m! This was increased by a £6m interest charge, and then reduced to the reported £54m by profit on player trading of £18m (presumably the Milner sale).

We are now insolvent to the sum of £20m, which is even worse than I thought it would be.

If I wanted said accounts is it as easy as paying for them through the companies house website? Would I get AVFC accounts or Reform Acquistions Ltd??

[ender4]

Just got the actual accounts at last.

Can you confirm the accounts say:

Some journo has tweeted that the accounts say "the directors have received confirmation that the owner intends to support the group for at least one year" the group being Reform Aquisitions Ltd I think?

and is there any context to this sentence?

[Risso]

Just got the actual accounts at last.

The actual operating loss made was an almighty £66m! This was increased by a £6m interest charge, and then reduced to the reported £54m by profit on player trading of £18m (presumably the Milner sale).

We are now insolvent to the sum of £20m, which is even worse than I thought it would be.

If I wanted said accounts is it as easy as paying for them through the companies house website? Would I get AVFC accounts or Reform Acquistions Ltd??

Reform Acquisitions is the consolidated group position, which gives the overall picture. Then there are Aston Villa Limited, Aston Villa FC Limited and Aston Villa FC Limited, which combine into the Reform accounts.

In the note for the post balance sheet events, it states that players sold raised £35.4m, and those bought cost £17.8m, which gives a boost to the accounts of £17.6m next year.

[Risso]

Just got the actual accounts at last.

Can you confirm the accounts say:

Some journo has tweeted that the accounts say "the directors have received confirmation that the owner intends to support the group for at least one year" the group being Reform Aquisitions Ltd I think?

and is there any context to this sentence?

Yes it does say that. But to be fair, this is just standard accounting jargon.

When you have an insolvent balance sheet (which we do), the company can't effectively pay its creditors without the support of the owner. For the auditors to sign the accounts on the going concern basis, they have to consider that this support is available for at least a year from the date the accounts are signed. So that is ALL that statement means. But watch the media go mad over it!

[TheEgo]

Just got the actual accounts at last.

Can you confirm the accounts say:

Some journo has tweeted that the accounts say "the directors have received confirmation that the owner intends to support the group for at least one year" the group being Reform Aquisitions Ltd I think?

and is there any context to this sentence?

Yes it does say that. But to be fair, this is just standard accounting jargon

.

When you have an insolvent balance sheet (which we do), the company can't effectively pay its creditors without the support of the owner. For the auditors to sign the accounts on the going concern basis, they have to consider that this support is available for at least a year from the date the accounts are signed. So that is ALL that statement means. But watch the media go mad over it!

Makes sense now you've explained it. Bit like acting or needing a guarantor for a loan/mortgage etc?